8. For the following annual cash-flow estimates, find the E(PW), V(PW), and SD(PW) of the project. Assume that the annual net cash-flow amounts are normally distributed with the expected values and standard deviations as given and statistically independent and that the MARR = 12% per year. End of Year, k Expected Value of Net Cash Flow, Fr SD of Net Cash Flow, F. -$7, 000 3,500 $600 2 3,000 500 2,800 400 A graphical portrayal of these normally distributed cash flows is shown in the following figure. k = 3 Time 2,800 k = 2 Probability 3,000 k = 0 /k = 1 3,500 -7,000 –5,000 +5,000 Cash Flow, $

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8. For the following annual cash-flow estimates, find the E(PW), V(PW), and SD(PW) of the
project. Assume that the annual net cash-flow amounts are normally distributed with the
expected values and standard deviations as given and statistically independent and that the
MARR = 12% per year.
End of Year, k
Expected Value of Net Cash Flow, Fr
SD of Net Cash Flow, F.
-$7, 000
3,500
$600
2
3,000
500
2,800
400
A graphical portrayal of these normally distributed cash flows is shown in the following figure.
k = 3
Time
2,800
k = 2
Probability
3,000
k = 0 /k = 1
3,500
-7,000 –5,000
+5,000
Cash Flow, $
Transcribed Image Text:8. For the following annual cash-flow estimates, find the E(PW), V(PW), and SD(PW) of the project. Assume that the annual net cash-flow amounts are normally distributed with the expected values and standard deviations as given and statistically independent and that the MARR = 12% per year. End of Year, k Expected Value of Net Cash Flow, Fr SD of Net Cash Flow, F. -$7, 000 3,500 $600 2 3,000 500 2,800 400 A graphical portrayal of these normally distributed cash flows is shown in the following figure. k = 3 Time 2,800 k = 2 Probability 3,000 k = 0 /k = 1 3,500 -7,000 –5,000 +5,000 Cash Flow, $
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